Brazil has some difficult choices to make

By Richard Quest

CURITIBA, Brazil — It was the briefest of trips but one I did willingly: a quick three-day journey across the South Atlantic to Brazil. 22 hours of flying to spend 48 hours in Curitiba — a metropolitan city of 3.5 million people and the state capital of Parana, in the subtropical south of the country. Curitiba is more than 300 years old. Colonised by European settlers from Germany, Italy, Poland and Ukraine, these nationalities still have strong roots here. In the heart of South America, this city has a distinctly European feel of which they are very proud. I was here to film for CNN Future Cities because for many years Curitiba has been seen as a beacon of civic planning. (It won the Global Sustainable City Award 2009.) But this trip also gave me the chance to see how Brazil is coping in this next phase of the financial crisis. This is very relevant with the final round of voting in the presidential election that took place on Sunday, Oct. 31. The battle is between Dilma Rousseff, former chief of staff to the current president, Luiz Inacio Lula da Silva, but who has never held elected office in her own right; and Jose Serra, former mayor of Sao Paulo and governor of Sao Paulo state. Rouseff is the handpicked protege of the current President Lula but she failed to get 50 percent in the first round of voting on Oct. 3, requiring a second round of voting next week. Although Rouseff has continued to have a lead in the polls everyone agrees that lead is narrowing and at best guess she is just points ahead of Serra. The Economist magazine this week came out and endorsed Serra — saying that Brazil would benefit from change at the top. They would agree with that in Curtitiba.

In Curitiba, where President Lula is far from popular, few people I spoke to had a good word to say for his years in office. Curitiba and Parana state is not his natural home. Here they are fierce in their criticism saying he had diverted too much of the industrial wealth created in the south, to subsidise the agricultural voters in the north, Lula’s home turf. So in Curitiba there was plenty of campaigning signs for Serra.

Whoever wins the election, Brazil has some difficult choices to make as it continues to map its phenomenal economic development. The country sailed through the great recession with barely a scratch. Its banks were largely isolated from the toxic debt which poisoned the banking systems of North America and Europe. With its strong commodity-based economy, buoyant exports, and enviable budget deficit of 2.6 percent, Brazil has ensured itself as a strong voice in the G-20 which meets next month in South Korea.